Page 9 - NorthAmOil Week 09 2022

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Chevron to buy biodiesel company for $3.15bn

US CHEVRON, the US oil and gas super-major, interest, taxes, depreciation and amortisation.
will buy Iowa-based biodiesel maker Renewa- Chevron’s acquisition combines REG’s grow-
ble Energy Group (REG) for $3.15bn in cash or ing renewable fuels production and leading feed-
$61.50 per share. stock capabilities with the oil company’s large
REG is North America’s largest producer of manufacturing, distribution and commercial
advanced biofuels. It turns feedstock into fuel at marketing position, said Chevron.
more than a dozen locations in the US and Ger- “REG was a founder of the renewable fuels
many, according to its most recent annual report, industry and has been a leading innovator ever
noted Reuters. since,” noted Chevron’s chairman and CEO, Mike
The news is important because it under- Wirth. “Together, we can grow more quickly and
scores how much major oil and gas companies efficiently than either could on its own.”
are diversifying as the push to reduce carbon Chevron said that the transaction was
emissions from fossil fuels continues. In Septem- expected to accelerate progress toward its goal
ber 2021, Chevron said that it intends to invest to grow renewable fuels production capacity
$10bn by 2028 on low-carbon technologies, to 100,000 barrels per day (bpd) by 2030 and
of which about $3bn was to be earmarked for that it means additional feedstock supplies and
renewable fuels. This is the first such deal since pre-treatment facilities.
the statement was made. Chevron’s renewable fuels business, Renew-
On March 1, REG announced that revenues able Fuels-REG, will be headquartered in Ames,
for the fourth quarter were $882mn on 148mn Iowa, where REG is currently based. The trans-
gallons (560mn litres) of fuel sold. For the full action is anticipated to close in the second half
year, revenues were $3.2bn on 621mn gallons of 2022.
(2.35bn litres). “Most people see (biodiesel) as growing in
Net income available to common stockhold- the US and Southeast Asia ... and view it as a
ers was $52mn in the fourth quarter of 2021, and blend-stock to get optimum margin because
was $212mn for the full year. Adjusted EBITDA it’s less expensive than renewable diesel,” Chev-
was $57mn in the fourth quarter of 2021, and was ron’s executive vice-president of downstream
$285mn for the full year. EBITDA, a measure of and chemicals, Mark Nelson, told Reuters in
a company’s profitability, shows earnings before an interview.™

Continental to invest in carbon capture project

US MIDWEST CONTINENTAL Resources is investing in a “Summit and Continental have a shared
carbon capture and storage (CCS) project via a vision to produce clean and cost-effective energy
partnership with Summit Carbon Solutions. for all Americans. This project will be transfor-
In a March 2 statement, Summit described mational for the ethanol and agriculture indus-
the development as the largest CCS project of tries and will have a substantial economic impact
its kind in the world. Continental will commit across the Midwest,” said Summit Agricultural
$250mn over the next two years to help fund the Group’s CEO, Bruce Rastetter.
development and construction of the project’s “Our goal since launching Summit Carbon
The CO2 will be associated capture, transportation and seques- Solutions has been to accelerate ethanol’s path
aggregated and tration infrastructure. Summit also expects Con- to becoming a net-zero carbon fuel, which
transported to North tinental to leverage its operational and geological can be done in the near term and with proven
Dakota via pipeline for expertise to help with the safe and secure storage technology” added Summit Ag Investors’ pres-
storage. of carbon dioxide (CO2). ident, Justin Kirchhoff. He cited Continen-
According to the statement, the CO2 will tal’s “unmatched experience and knowledge”
primarily be captured from ethanol plants and of the Williston Basin, where the CO2 will be
other industrial sources in Iowa, Nebraska, Min- sequestered.
nesota, North Dakota and South Dakota. It will Continental’s CEO, Bill Berry, said his com-
be aggregated and transported to North Dakota pany had been “actively engaged” in limiting its
via pipeline, where it will be permanently carbon footprint and believed the CCS project
sequestered in subsurface geological formations. would become a model for the rest of the world.
Summit said the project had commitments “Carbon capture will play an integral role
from 31 partner ethanol facilities to deliver more in helping reduce global emissions, and we
than 8mn tonnes per year of CO2, with initial believe Summit Carbon Solutions has the
pipeline capacity of 12mn tpy, which could later most capital-efficient project to further this
be expanded to up to 20mn tpy. goal,” he said.™

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